Please tell us about yourself
For most people, college is a time for fun, bunking classes. For me, it was a time when I first discovered my fascination for the stock market, and which propelled me to start CapitalVia Global Research Limited, an investment advisory company.
Back in 2003, when I was studying commerce at JN College in Bangalore, I was trading every day. I picked up odd jobs after classes, be it working part-time for Hewlett Packard’s BPO as a business process executive or selling cellphone SIM cards on roads, to earn pocket money that I could invest in the markets.
How did you end up in such an offbeat, unconventional and fascinating career?
I was born and brought up in a very small town Burhanpur in Madhya Pradesh where I studied till Class XII. After that I went to Bangalore for my graduation in commerce from Shri Bhagwan Mahavir Jain College.
I chose Bangalore because I wanted to be independent. I have relatives in places like Mumbai and Delhi but if I had gone there for my studies, there would have been pressure on me to stay with them. I wanted to focus on my studies which would not have been possible had I stayed with my relatives.
In Burhanpur I was like a frog in a well. Bangalore changed all that. I started reading a lot about how stock markets work; how money could be made by trading in shares. I had a lot of time on any given day and I would spend that reading about stocks.
During my second year of graduation I started doing part-time jobs like selling SIM cards and data entry jobs in BPOs. This helped me earn Rs 3,000 a month. It was big money then for a college student. With this money I opened a trading account with Sharekhan because it had a toll free number via which one could buy and sell orders. Being a student I wanted to save every penny I had. Since it was a toll free number I’d call them at least 30 to 40 times in a day.
Apart from that I did my own research by studying fundamental and technical analysis. I wanted to buy a book called The Warren Buffet Way. It cost Rs 1,100 then. I would walk to and from college and save Rs 20 everyday for the book. I bought the book after a couple of months. I was very passionate about trading and reading
I used to interact with people online and write a lot of reviews about buying and selling stocks on my blogs and on various groups on Yahoo! and Google. People started appreciating my trading calls and requested me to give them recommendations. I began by giving trading calls for free to them. Stock trading for me is a hobby turned into passion turned into profession. I didn’t intend to charge my followers at that point in time. I was earning enough out of my part-time jobs to take care of my college fees, food and hostel in Bangalore.
In fact, I would even ask my friends to swipe my credit card when they shopped and reimburse me in cash. I would make Rs 4,000-5,000 a month and I would transfer the entire sum to my savings account from where it would go to my demat account for trading. Despite belonging to a well-to-do Indore-based business family, I ceased to depend on my father for finances since my second year of college.
It wasn’t sunshine all the way. I also lost a lot of money while trading, the biggest mistake being to leverage on my savings by almost 10 times. This made me realise that while my love for trading sure had the potential to become a career, a day trader’s life is no cakewalk.
It was towards the end of graduation in 2005 that I noticed another key fact: Throw a rock and you’re sure to hit one of the several large broking houses specialising in handholding big investors with deep pockets. But there was no one to guide a newbie like me.
That got me thinking about starting a web-based research company, which would focus on technical analysis and provide recommendations or real time trading signals/data to traders for intra-day and short-term trading.
This would encourage them to trade as an informed trader and not merely on speculation. So, in October 2006, I registered an online domain name as Capitalvia.com, which cost me Rs 400.
What was your career path?
The company started off very casually because I still had my Master’s degree classes to attend. I basically started doing technical analysis for traders and sold the data to interested customers as a trial pack for two-three days or Rs4,000 a month for a full-subscription pack.
However, my part-time entrepreneurial days were numbered. My family placed a lot of emphasis on further education and I put my one-man company on the backburner in 2007, to join SP Jain College, Mumbai, for a one-year MBA programme in investment banking. On returning to Indore in June 2008, I resolutely dived head-first into CapitalVia’s operations.
You chose to do your MBA from Dubai and Singapore instead of Mumbai. Why?
After my graduation I went to S P Jain to do my MBA from Dubai and Singapore. I wanted to study from Singapore because the way people train and think there is very different from how people in India train and think. If you were to ask a 10 or 15-year-old in India what he wants to become in life, he will probably say a doctor or engineer. If you asked the same question to kids from Singapore or London there answer would be bond trader or equity trader. That made me realise that trading couldn’t be a part-time activity. It was when I finished my MBA I realised that I wanted to be an entrepreneur and so I opted out of campus placement.
When I began my MBA the vision that I wanted to start on my own was very clear. By the time I finished my course in 2008 it was very clear that we would be facing rough economic weather going ahead. I knew India would be going through a rough patch but I knew what I was doing.
You finished your graduation from Bangalore but decided to set up CapitalVia in Indore. Why?
It would have been very challenging for me to start CapitalVia in Bangalore. Though I knew the city had superb infrastructure and the talent available there was also very good, the cost of getting both these elements for a successful start-up venture would have been very high. So I knew that to survive a harsh economic situation I would have to begin from a city where costs would not be very high. I chose Indore because I knew I could pare my costs here without compromising on the quality of infrastructure or talent. In Indore I could hire people at half the cost of what I would get in Bangalore.
But more than the cost variable I knew a talented employee in Indore would be more than happy to get paid Rs 100 for doing a job which the same talent in Bangalore would not. It is all about attitude. A world-class office infrastructure in Bangalore would be a given. But if I were to give the same infrastructure to people in Indore they would respect me for that. I knew it would be a great motivation factor for my employees and boost their self-esteem. That would help me retain them longer period after I trained them to serve our clients.
So, cost differential was not the only reason I decided to start CapitalVia in Indore. Today, we hire mostly MBAs and train them rigorously to service our clientele of 2,600 across India and abroad.
Tell us about your experience starting CapitalVia?
The first thing I did was to rent a small office in the town and hire 4-5 people. By the end of two months, we already had about 40-50 registered customers. Initially, I was playing every role in the company—from office boy to CEO—but the fact that I chose to set up shop in a tier II city had its advantages.
Think cheap labour, lower rents, lower lifestyle expenses as well as people’s expectations. Moreover, the manpower is zealous and hardworking with an immense potential to learn. It was crucial for me to find such a combination since the company was taking off bang in the middle of the recession.
Other than a few thousand bucks for the office space, which I procured from my corpus made in the stock market, I did not invest in anything else. This is why we managed to break even within four-five months.
As the company grew, my set of challenges kept pace with it. Being an entrepreneur is easier than being a people’s person but I learned to manage employees and their issues. We generated Rs1.32 crore in revenue by the end of our first year, backed by a staff strength of 20, all trained by me.
By mid-2009, we had moved office twice, seeking larger space, and increased the headcount to 45. We were generating profits of 25-30%, and this by promoting ourselves only through SMS and online marketing. However, most of the money earned was re-invested into infrastructure, training and marketing. In fact, we never garnered any cash profits as such.
Today, CapitalVia boasts a 510-strong team, of which 200 are under training and a customer base of about 2,500. We house one of the largest professional research and analysis teams in the country. Our product repertoire has grown since inception. The prices currently range from Rs4,000 for individual day traders to Rs 25,000 for high networth individuals. (Prices vary depending on a high risk and high reward ratio.) We’ve been growing at over 100% year-on-year.
Challenges as an entrepreneur when you began in 2008…
The biggest hurdle was overcoming the prophesies of nay sayers who wanted to pull me and my business idea down from the very beginning.
When we began we only had a five-seater office measuring about 500 to 600 square feet in Indore. I hired four people then who are still with the organisation. So, we were the peons, cleaned floors with water dripping from leaking ACs, did the plumbers’ job along with handling clients and offering them technical and fundamental advice on stocks. This is what I mean by attitude.
As a start-up employee you must be willing to do whatever comes your way; doesn’t matter even if you are an MBA from a reputed institute.
The other challenge, which we actually loved, was scaling up our employee strength to 550 from five people that we began with.
We knew we wanted to keep our operations low-cost and plough all our profits back into expanding the business. 100 per cent of what we earned was re-invested to scale up operations.
What are your future plans?
Currently, we have operational offices in Indore, Bangalore, Ahmedabad, Singapore and Delaware (US). But there is no time to rest on our laurels. We want to help the Indian SMEs ecosystem manage their currency risks.
CapitalVia aspires to be the Merrill Lynch for Indian SMEs because the latter cannot afford to take help from larger research MNCs due to higher costs. We also hold free education programmes and trader camps for our customers in Indore, where we invite 200-300 people.
We are now planning to open 12-15 branches across the country, first in Delhi and Mumbai and then expanding to tier II and III cities by the end of 2012-13. We expect to generate revenues of Rs35 crore by then. Since this is an upcoming industry, people have often tried to pull me down.
However, my motto is to keep moving forward. If you can’t fly, you may crawl. That’s what helped me, a boy who finished his schooling in an off-the-map place like Burhanpur in Madhya Pradesh, find the strength and conviction to forge a Rs13 crore business from scratch.